Development will secure country against 'tyrants', energy secretary says
The move comes after Rishi Sunak watered down green policies
Campaign groups say they may have a legal case against government's decision on Rosebank
Campaigners have hit out at multi-billion-pound tax breaks for oil giants they claim are "hidden in the small print", after the government green lit plans to develop the Rosebank oil and gas field in the North Sea in a move critics have described as "obscene".
On Wednesday, the government said it was putting energy security first as it gave the go-ahead for its largest new development in the North Sea in years – despite furious opposition from environmental campaigners.
Energy security minister Claire Coutinho said: "The jobs and billions of pounds this is worth to our economy will enable us to have greater energy independence, making us more secure against tyrants like (Vladimir) Putin.
"We will continue to back the UK’s oil and gas industry to underpin our energy security, grow our economy and help us deliver the transition to cheaper, cleaner energy."
'People are suffering'
The move prompted an immediate backlash, with End Fuel Poverty Coalition coordinator Simon Francis criticising the decision to award developers including Norwegian oil firm Equinor a reported £3.75bn in tax relief to develop Rosebank.
"Hidden in the small print of the deal is that this project can only go ahead thanks to a massive tax break the government is giving to international oil and gas giant Equinor," Francis said.
“Households struggling with their energy bills will be shocked that the new energy secretary has chosen to hand a multi-billion pound tax break to this Norwegian firm, rather than help people in the UK suffering in fuel poverty."
Rosebank’s owners say its development will create 1,600 jobs during the peak of its construction and 450 over the long term, while producing £6.3bn that could be invested in UK businesses. The oil and gas industry currently supports tens of thousands of jobs in Scotland.
But Francis said the tax breaks – which come in the form of an investment allowance for new oil and gas developments introduced by prime minister Rishi Sunak as well as the elapsing of the windfall tax – could have been used to provide additional support to help disabled households, those living off the gas grid and the elderly.
He added: “The government’s major drive to keep the country hooked on fossil fuels will be for little reward. Figures show that more North Sea production will only give us an extra year of domestic gas, which will be charged to struggling households at global market prices.
"This is a political choice and households will remember this decision at the general election."
Green Party MP Caroline Lucas was among those who hit out at the decision to develop the oilfield, describing it as "morally obscene". She pointed out that the move would not equate to cheaper energy bills for consumers - despite the subsidy given to developers Equinor and its partner Ithaca Energy.
“Giving the green light to this huge new oil field is morally obscene. This government must be held accountable for its complicity in this climate crime," she said.
She told Yahoo News: "This climate crime will be financed by the Treasury gifting Equinor – which recently announced record 2022 global profits of £62bn – a tax break straight from the public purse, worth £3.75bn.
"This giveaway is the result of an egregious loophole in the windfall tax, meaning that for every £100 fossil fuel companies plunge into yet more climate-wrecking oil and gas, they can claim £91.40 back from the Treasury.
"Energy security and cheaper bills aren't delivered by allowing highly-subsidised, foreign-owned fossil fuel giants to extract more oil and gas from these islands and sell it overseas to the highest bidder.
They come from grasping the opportunities of unblocking and upscaling abundant and affordable renewables, and properly insulating the nation – ensuring clean air and water, thriving nature and wildlife, and high-quality skilled and stable jobs in the process," she added.
The Department for Energy Security and Net Zero said: "According to Equinor’s estimates, the Rosebank project represents a direct investment of approximately £8.1bn, of which £6.3bn is likely to be invested in UK-based businesses, with the developer also estimating that at its peak the field producing 69,000 barrels of oil and 44 million cubic feet of gas per day."
Sunak waters down green policies
The government's move on Rosebank came a week after the prime minister announced changes to net zero goals that included an extension on the timeframe to ban the sale of new petrol and diesel cars, among an easing of other environmental policies.
The move has been read by many pundits as electioneering, following a byelection win in former prime minister Boris Johnson's old constituency of Uxbridge and South Ruislip, which came on the back of a campaign focused on the controversial Ulez charge.
Sunak appears to be hoping that his direct opposition to Labour's stance on the issue (the party has pledged to ban new domestic oil and gas developments) will be a vote winner.
But by pushing back decisions on the climate and backing new oilfields in the North Sea, Sunak may be causing further problems for himself - with campaign groups warning of legal issues over Rosebank.
Tessa Khan, executive director of campaign group Uplift, said: “By approving Rosebank, Rishi Sunak has confirmed he couldn’t care less about climate change.
She told Politico: “There are strong grounds to believe that the way this government has come to this decision is unlawful and we will see them in court if so."